3.5.15 Exempt Interest for the Ex Period

For Purchase Deals and Sell Deals booked in the Ex Period, you can specify whether you want to calculate the interest for that period. If you check this box, the system will not apply interest for such deals. Also, the system accrues the holdings as of the ex-date, and will not pass any interest related accounting entries related to the deals booked in the Ex period. In case you do not opt for a zero-interest facility, the system accrues the actual holdings during the accrual period, including the buy/sell deals booked in the Ex period.

Consider the following example.

Let us consider a security with:

Coupon Start Date – 01 Aug

Next Coupon Date – 08 Aug

Record Date –05 Aug

Coupon Interest – 3.65% (Per Annum)

Interest Accrual Frequency – Daily

Now let us assume that on 06 Aug 5000 Units are sold

Case 1: If you do not opt for Zero interest Accounting entries are passed for event SSLP (Interest Only) Dr IntComp_RCPY- 100 (IntComp_SOEX) Dr Sec Bridge GL - 100 (IntComp_SOEX)

Case 2: If you opt for Zero interest For interest, the system does not pass any accounting entries